Feds broke own rules on sub contract, says Casey

TRURO - The federal government appears to have contravened its own rules for awarding major Crown projects, says MP Bill Casey.
The Independent member for Cumberland-Colchester-Musquodoboit Valley called on Auditor General Sheila Fraser Thursday to conduct an investigation into the government's submarine maintenance contract. The estimated cost for the 15-year contract is $1.5 billion, while the Treasury Board regulations state a project exceeding $100 million is to be considered a major Crown project.
"A contract that size is supposed to go through a senior project advisory committee," Casey said with representatives of more than 10 federal departments. "They evaded the whole process by downgrading it to a service contract."
He doesn't believe the contract would have been awarded if it had gone through the major Crown projects process.
But Jacques Gagnon, director of communications for Public Works and Government Services Minister Michael Fortier, said the regulations only apply to capital expenditures and not maintenance and operation.
Casey said capital expenditures are defined as all expenditures made to acquire or improve capital assets and improvements including any alteration or renovation that significant increases the performance, value or capability of a capital asset or extends its useful or economic life by more than a year.
"These boats ... (are) being brought in for a mid-life refit and to extend their life," Casey said. "Their argument does not hold water, in my view, at all."
Casey said he knows there was opposition from within some of the federal departments during the process.
The government recently announced that a British Columbia consortium won the maintenance contract. Ottawa informally awarded Canadian Submarine Management Group the contract's first phase almost a year ago.
But the Conservative government put a signed, written agreement on hold last year after a group that includes Maritimes-based rival Irving Shipbuilding filed a lawsuit.
Irving Shipbuilding and Fleetway Inc. - part of a rival consortium led by British defence giant BAE (Canada) Systems Inc. - challenged the decision by calling for a judicial review. The Irving-owned companies stood to gain $750 million in work.
The lawsuit alleges one of the companies that participated in the winning bid played a role in developing the statement of work and evaluation criteria for the contract. The allegations have not been proven in court.
Casey has also asked the president of the Treasury Board Vic Toews for a review.
"The president of the Treasury Board can say this is not right and we're going to fix it right now and I hope he does," he said.
With CP Files